"With the Commonwealth budget coming under increasing pressure over the next few decades, the fiscal sustainability of all policies, including superannuation, will demand greater public scrutiny," Mr Parkinson said." If the government stops wasting money that's not theirs, They might not need to grab every dollar there is, we are already one of the most taxed nations. Rather than setting taxes at what they spend, how about they only spend what they get. Is this not basic book keeping?
I must be strange but I don't view the current superannuation tax arrangements as costing the Federal government and taxpayers anything, not 1 cent, this is because the tax concessions are low rates of tax, they are not paid out to superannuation beneficiaries from consolidated revenue or from taxpayers. Swan and his cronies seem to believe the government is giving away free money, the Greens argue it costs the Government in excess of $30 billion/year - this is not correct as I see it, this is taxes that are not collected, not costs at all, just revenue that they are missing out on. Am I wrong about this?
You're correct about the "actual cost vs. lost opportunity" part, however there is a point in time coming quite soon (next year IIRC) where the tax concessions on super will be greater than the equivalent pension liability. So yes, the "lost revenue" argument is rubbish if you count the total amount of concessions but those concessions do actually cost the taxpayer the difference between the concession and how much the government would spend if they just gave old people pensions instead. The costs are about equal right now, but either next year or the year after it will become cheaper to give people pensions than to keep giving them tax breaks.
I interpret this as the Baby Boomers having milked the cow dry to the point of unsustainability, now it's time for the next generation to start paying for them. Where's auspm when you need him?
Thanks Big AD, it's probably long overdue, but it is about time the gov investigated how to spend less.
Everyone still faces 15% tax on employer contributions, super investment earnings, normal rate capital gains tax and unconcessional personal contributions. What 15% tax are they referring to?
The story kept changing on the radio today depending on whom the ABC were interviewing. But regardless of the fund manager...they all said no matte what happens (which they admitted they didn't know) Self-Managed Super Funds were the most at risk It was hilarious... they hate SMSF's SOOOO much
Labor hates SMSF's because the they eat into union profits via industry super funds and because they are socialists who hate anyone who does not submit to their control systems.
I am going to go onto the federal parliament website and obtain all of the backbenchers emails both upper and lower housees. There are over a million voters in SMSF's plus their adult children. There are many dissatified Labour members who are not happy with their leader. It would only take three of them to cross the floor to defeat the budget and bring on an election. Many of these labour members know they are gone after the next election kin regards non recourse
Like shiney! just trying to get my head around this because it doesn't make much sense. So the Govt is arguing that they can raise, say, $10 billion by increasing the tax on new inflows into low tax superannuation but only spend, say $7 billion giving people pensions? But aren't the people who would be paying tax different to those people who are receiving a pension? They can't be the same ones in any given financial year. Hence they are simply increasing taxes on workers incomes to churn some back to pensioners to pay for other Govt expenses, and when applied over a number of years seems to imply that there will be more future pensioners. Hence - all else equal - more future taxes on future workers will be needed as future Govt liabilities have increased. Unless they are taking the $10b and leaving it in a piggy bank somewhere (yeah, right) then they are saying we'll take your money for current spending now so that we can afford to pay you back less in the future than you would otherwise have saved yourself Except for possibly public servants current super vs future pension payments this doesn't make any sense to me.
What's happening at the moment is that the tax breaks give a significant advantage to people on higher incomes. 50% of the the funds that are taxed at concession rates come from only 20% of wage earners - the ones on higher incomes. That isn't an immediate problem at the moment because the amount the government is paying out in pensions today is still reasonably low, however it will become a problem in the future because the amount of money spent on pensions will rise in the future as the Baby Boomer population starts to retire. Not everyone of that age has been paying into super for their entire working lives so the ones who started paying in late and/or those on lower incomes will still rely largely on the pension. What is a reasonably urgent issue is whether giving a tax concession to people who don't actually need a tax concession to encourage them to save for retirement is sustainable over the long run. Unfortunately it isn't and encouraging people to save for retirement was the whole purpose of the tax concession in the first place. For example, if you're on $150k/p.a. now, you don't need to save for retirement as quickly or as urgently as someone on, say, $50k/p.a. You might well decide that you want to, but you don't need a huge incentive to do so, whereas the person on $50k/p.a. needs a greater incentive to forego extra money now because they don't have as much to spare. The (recently introduced) co-contribution from the government fixed a weird situation where lower paid workers were actually taxed at a higher rate for saving via super than if they'd taken the same money in wages. That was just a stupid situation but with a limited amount of money to go around, increasing concessions at the lower income end means reducing concessions at the higher income end. That brings up the argument about "fairness" and it's certainly a valid one, but in needs to be looked at in the context of there being a minimum amount of money needed for any given person to retire on and there being a limited amount of money available to pay for any given person's retirement. Younger workers now would (naturally) be annoyed to be paying higher taxes in the future to cover the cost of all the extra pensioners if there are so-called "self funded" retirees swanning around with massive nest eggs created from spare income that wasn't taxed very highly. Even older workers now would (naturally) be annoyed to be paying higher taxes instead of saving extra for their retirement when there are people on much higher incomes channelling lots of low-taxed money into their own super. Essentially, the way things are set up at the moment the super concessions benefit people who currently earn high incomes at the expense of people who currently earn low incomes plus the taxpayers of the future who earn any sort of income - people who earn lower incomes now can't save as much themselves because their taxes have to pay for current spending and people in the future will collectively have to pick up the cost of those (current) lower paid workers when they stop working and need to go on the aged pension instead of relying on additional super funds.
After doing some digging this is actually to fix a stuff up of the Julia/Greens government. Surpise! They stuffed up again! The carbon tax introduction included a raising of the tax free threshold for Pay as You Go or Pay as You Earn (PAYE) income, as we know. Part of the big swindle of the carbon tax was that they needed to raise a tax to lower other tax. The pre-existing superannuation tax system taxed everyone equally rather than oppressively, at 15%. At the time the carbon tax was pushed through, the government overlooked that raising the PAYE threshold suddenly changed many people to paying less personal tax than super contributions tax. Overnight anyone earning up to about $37,000 had their super contributions were being taxed at 15% while their effective personal tax rate is lower. So now the government has realised this (or kept quiet about this until recently), they are using the tax issue as evidence of the super system needing "sweeping reforms" to "correct inequity" and similar phrases of envy to change the super rules. Big AD I take exception to your premise that there is a "limited amount of money to go around" and that the concessions are unfair. They are entirely fair and the money we are talking about is peoples' money, used in a system designed by the same political party that wants to break it. Gillard especially talks about making the super system 'sustainable' while making it harder to generate and then sustain large personal savings. Plus, we have the same old tax argument where some people talk of money not being taxed as 'lost' or 'costing' the government. Which is defying reality. It doesn't cost them anything! There was nothing (majorly) wrong with the superannuation system where it was heading, into a majority of funds/people in self managed super funds. Now they're messing with it to distract from and pay for Labors total financial incompetence. Leave our Superannuation alone!
What pisses me off about this is that there is no consideration for the probability that the high income earners actually deserve what they earn. Instead of fart-assing around, some people actually apply themselves to benefit from their hard work and earn an above average living, only to have a socialst govt. declare it unfair or "advantaged". BS! Your earnings aren't based on some sort of f$%#&ing lottery!!!! +1
That sweeping statement supposes that the current progressive tax system is fair - which it isn't because it taxes higher earners with higher rates. Plus higher earners pay additional taxes already that don't apply to most people, i.e, the majority of the flood tax, +15% super contributions tax, plus no doubt an additional 15% Super earnings tax, +30% health insurance cost, etc. So as you earn more, gain experience, become more valuable in the workforce, add more to the economy, your reward is to pay higher and higher rates of tax, both in real dollar terms and as a percentage of what you earn. But that's not enough for the socialists, they want more...and more and more by eventually taxing their Super at the high earners' marginal tax rate, i.e, effectively making Super irrelevant for high earners. Why should Super be treated the same as your income, which is what you and other socialists like you want? The goal appears to be to bring everyone down to a level where we can all just 'get by'. Where everyone is equal, no matter how much or how little they have contributed to society throughout their lives. I think that is unfair. Meanwhile of course, the socialist politicians who will put these unfair measures in place will themselves be totally immune and continue to sponge off the same people they are intent on screwing as much as they can. I say bollocks.
